You Might Want to Reconsider that Paypal Donate Button

I woke up this morning already in a bad mood. I have mystery hives and my face was swelled up as if I were stung by a wasp in the middle of the night. I’m still trying to decide if that’s entirely impossible or not. My husband is on his way home with Benedryl though and I’ve been trying to get a little bit of work done here at my desk in pain.

Then on a whim I opened Facebook to make sure I was spelling a name correctly (I know that sounds silly, but it’s true!) and my pain was forgotten and washed away when I saw the grouping of friends that had all shared a link to a post over on Regretsy.com : http://www.regretsy.com/2011/12/05/cats-1-kids-0/

Then I was just plain angry and didn’t care how much my face hurt. Paypal was sucking holiday joy away from families – from children! – and they justified it by saying that raising money for sick cats would be a more worthy cause. What the hell?

The situation in a nutshell

Regretsy.com raised enough money to distribute toys to over 200 children that needed to have a happier holiday this year.The community responded so well and with such good tidings that they had enough money to send them not only a toy, but a small financial donation to help those families buy food also. That is awesome ~ and it’s always good to know that people have good hearts inside them.

I live in a neighborhood where the economy has taken a major toll on things, I see firsthand how many families need and appreciate help like this. Food on the table, a heating bill paid, a gift under the tree, a smile on a child’s face. It’s amazing when you see it in action – you’ll need tissues to wipe away tears if you’re around when it happens.

Then along comes Paypal and squashes all the hopes and dreams of everyone involved! They force Regretsy to refund all the donations and purchases and they lock away all the money – except for the fees that they took out for themselves, of course. You can read the full conversation that was had with Paypal’s representative here at Regretsy <==

Do YOU Use a Paypal Donate Button?

I want address the part of this that I think has an effect on marketers, bloggers, web design folks, and just about anyone that does business online if they use a Paypal Donate button. I know I see them everywhere – donate to support your favorite web application, your favorite WordPress plugin, your favorite free blog theme, your favorite website full of free craft patterns, your favorite whatever it might be….

Paypal is telling Regretsy that the Donation button is only for nonnprofits. Keep in mind that it does not say that anywhere in the documentation on Paypal’s website or in the documentation for using the Donate button. (or at least it didn’t before today, I’m sure they’ll change that soon) They made them refund all the donations.

Buy Now Might Not Work Either

So in an effort to correct the situation Regretsy raised their funds a second time using the Buy Now button, allowing contributors to purchase mystery gifts for the kids on the list. You chip in some money, a kid gets a gift. Sounds normal to me – that’s how these things usually work. I’d gladly pitch in for something like that and have done so during similar programs in the past.

Paypal squashed it all again and told them they’d have to refund all that money too telling them they weren’t allowed to sell gifts and they could only ship to the buyer. That in itself sounds completely ridiculous ~ considering how many times I’ve used Amazon.com or 1-800-flowers and other merchant websites to purchase a gift and have it shipped directly to the gift recipient, wrapped and with a card even! Is that the best you’ve got, Paypal?

I feel the rant coming on….

I know I’m about to reach full on rambling rant status here shortly so I’ll just say these last two things and then I’ll close my blogging window.

Loretta Oliver, married to the comic book geek of her dreams and mother of four amazing young men, has been working from home full time since 2001. With a busy transcription service business, a few niche sites, and a handful of other internet marketing projects on the go, the computer is always fired up and the ideas are always flowing.

Comments

You have to take this away from the helping people and all about the legal. Paypal seriously has to cover themselves and in case you haven’t noticed recently, I’m pretty sure they are under a ton of scrutiny. Hence we’ve had to send so much stuff in this last year.

When you donate, besides the obvious helping the cause, what secondly comes to mind? I may be shallow but for me it means I can write it off my taxes. A donation means it’s tax deductible and that is because it is non-profit.

It sounds to me like something went huge and paypal will now be rewriting all their legalize to confuse the heck out of us. Thank goodness my paypal is used for biz only. There’s a whole other issue these people are going to have to work with and that’s the taxes from any money’s collected. If it’s in their same paypal account then how are they going to report that? That’s not paypals issue as they just report to the gov that it was collected, but with no non-profit status these people/biz/organization would HAVE to pay taxes on the funds received. Then if they live in states like WA they would also need to pay sales tax on those funds collected.

Again, not paypals issue to deal with, but they are saving these people a ton of money by telling them no. But consider how many other companies they have had to deal with that weren’t ethical. We’re all quick to jump on them for allowing it to happen through their site.

Devils advocate from someone that is used to seeing a donate to my coffee/beer/pizza fund on a blog 🙂

If they really wanted to cover their hides from a legal perspective they would put all that in their documentation about using the donate button and avoid messes such as this from the beginning though. It did not do so. They even mention in their acceptable use policy how donation don’t have to be linked to a charity or nonprofit. So it would seem that Paypal is talking out of one head and hoarding fees to keep for themselves with the other.